WILLIAM H. STEELE, Chief Judge.
This matter comes before the Court on defendants' Motion to Dismiss (doc. 3). The Motion has been extensively briefed and is now ripe for disposition.
The case of Larry Crouch, et al. v. Teledyne Continental Motors, Inc., Civil No. 10-0072-KD-N (the "Crouch Action"), was something of a cause célèbre in this District Court. During the 20 months that the Crouch Action was active on Judge DuBose's docket, the parties racked up more than 400 docket entries, culminating in a three-week jury trial that spanned from July 18, 2011 through August 5, 2011. Although those proceedings concluded (at least, insofar as this District Court is concerned) some time ago, the instant litigation emerged as a spin-off from the Crouch Action when the parties herein could not agree as to who must foot the bill for the seven-digit attorney's fees accrued by the defendant in that case.
At issue in the Crouch Action was whether Teledyne Continental Motors ("Continental") was liable for a November 2006 airplane accident in Bardstown, Kentucky, which resulted in serious permanent injuries to Larry Dale Crouch and Teddy Lee Hudson. According to the First Amended Complaint in the Crouch Action, Continental had manufactured and sold a magneto that was installed as the ignition source for the subject aircraft's engine in
The First Amended Complaint in the Crouch Action alleged, inter alia, that Continental (by and through its agents, servants, employees and contractors) had negligently designed, engineered, tested, manufactured and installed the magneto.
Having been vindicated by the verdict following a bruising, grueling, drawn-out legal struggle in the Crouch Action, Continental celebrated its victory by initiating new litigation seeking recovery of its Crouch Action attorney's fees.
The Complaint in this case — which was initially filed in Mobile County Circuit Court prior to being removed to this District Court on diversity grounds — alleges three causes of action against the Jewell Defendants. The first two claims sound in breach of contract, and are centered on a Product Support Agreement (the "Agreement") entered into between Continental and JA on or about January 1, 2005. Neither JJA nor Mr. Jewell was a signatory to the Agreement. By the terms of that Agreement, JA "agrees to indemnify and hold [Continental] harmless from and against all claims, demands, obligations and liabilities ... to the extent that such claims, demands, obligations or liabilities have resulted from or arisen out of any act or omission of [JA], its officers, agents, representatives, servants, or employees." (Doc. 1-1, ¶ 26 & Exh. A at ¶ 21.)
On a motion to dismiss for failure to state a claim, "the court construes the complaint in the light most favorable to the plaintiff and accepts all well-pled facts alleged... in the complaint as true." Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir.2009); see also Speaker v. U.S. Dep't of Health and Human Services Centers for Disease Control and Prevention, 623 F.3d 1371, 1379 (11th Cir. 2010) ("In ruling on a 12(b)(6) motion, the Court accepts the factual allegations in the complaint as true and construes them in the light most favorable to the plaintiff."); Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir.2010) (similar).
To withstand Rule 12(b)(6) scrutiny, plaintiffs must plead "enough facts to state a claim to relief that is plausible on its face," so as to "nudge[] their claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
More generally, it bears emphasis that Rule 12(b)(6) is a low threshold for a plaintiff to overcome. This Court cannot and will not dismiss a claim merely because recovery on the merits at trial appears doubtful or dubious. See, e.g., Speaker, 623 F.3d at 1380 ("a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely") (citation omitted). A Rule 12(b)(6) motion is not a vehicle for forecasting the plaintiff's likelihood of success on the merits, and jettisoning claims based on such predictions.
The Jewell Defendants have now jointly moved to dismiss the Complaint in its entirety on the following grounds: (i) personal jurisdiction is lacking as to JJA and Mr. Jewell; (ii) dismissal (or alternatively, transfer) of this action is warranted under the doctrine of forum non conveniens and/or 28 U.S.C. § 1404(a); and (iii) the Complaint fails to state a claim on which relief can be granted. Each of these arguments will be considered in turn.
Without question, personal jurisdiction properly lies as to defendant JA, the signatory of the Agreement with Continental. In that Agreement, JA expressly agreed that any litigation brought under or relating to that Agreement was to be brought and conducted solely in Alabama. In that same clause, JA consented to personal jurisdiction in Alabama. Such forum-selection clauses are routinely upheld as valid and enforceable. See, e.g., Polaris Sales, Inc. v. Heritage Imports, Inc., 879 So.2d 1129, 1132 (Ala.2003) (describing "well-established law of Alabama that forum-selection clauses will be enforced so long as they are not unfair or unreasonable under the circumstances").
However, defendants JJA and Mr. Jewell argue that there is no personal jurisdiction as to them because (i) they were not signatories to the Agreement; and (ii) they lack the requisite minimum contacts with the State of Alabama. On the latter point, JJA and Mr. Jewell make a factual showing, inter alia, that JJA is a Mississippi corporation; that Mr. Jewell is a Mississippi resident; that JJA has never done business in Alabama, has never had agents or employees in Alabama, has never advertised or provided services in Alabama, and has never maintained an office in Alabama; that Mr. Jewell has never done business in Alabama; and that all of JJA's work on the aircraft at issue in the Crouch Action was performed in Mississippi, in connection with which the aircraft never passed through or over Alabama. (Jewell Aff. doc. 3, Exh. A, ¶¶ 1, 5-12.)
Plaintiff's response to these personal jurisdiction arguments is twofold. First, Continental maintains that JJA and Mr. Jewell are bound by JA's contractual consent to personal jurisdiction because all of the Jewell Defendants are alter egos of each other. Second, Continental asserts that even under a traditional minimum contacts analysis, personal jurisdiction is properly exercised over JJA and Mr. Jewell in this District Court without regard to the terms of the Agreement.
In plaintiff's view, the exercise of personal jurisdiction is proper as to JJA and Mr. Jewell because JA contractually assented to personal jurisdiction, and the Agreement is properly extended to cover both JJA and Mr. Jewell as JA's alter ego.
Continental has not addressed these prerequisites for piercing the corporate veil in any meaningful way. It has not alleged, much less shown, that JA misused its control over JJA, that such misuse of control harmed Continental, or that any injustice or inequitable consequences ensued. There is no allegation, for example, of trickery or deception by JA as to the entity with which Continental was doing business. To the contrary, the undisputed evidence is that Continental knew the difference between JA and JJA, had separate business relationships with each of them, and required each of them to sign separate agreements, reflecting their respective functions and relationships with Continental. (Doc. 17, Exh. E, at ¶¶ 2, 5.) Continental has not alleged, and apparently cannot allege in good faith, that it was fooled or misled into thinking that JA would perform all installation services related to the Agreement when in fact it intended to have JJA perform some of those services, all as a scheme to dodge JA's indemnity obligations specified in the Agreement. After all, that Agreement on its face was
More fundamentally, the record establishes (with no contrary showing by Continental) that the magneto that was the centerpiece of the Crouch Action was ordered and paid for by JA, not by JJA or Mr. Jewell. (Doc. 17, Exh. E, at ¶¶ 3-4 & Exh. 1.)
In the alternative, Continental contends that personal jurisdiction may properly be exercised over JJA and Mr. Jewell in Alabama under a traditional "minimum contacts" analysis.
Absent contractual acquiescence to personal jurisdiction, "[w]hen a defendant challenges personal jurisdiction, the plaintiff has the twin burdens of establishing that personal jurisdiction over the defendant comports with (1) the forum state's long-arm provision and (2) the requirements of the due-process clause of the Fourteenth Amendment to the United States Constitution." Matthews v. Brookstone Stores, Inc., 469 F.Supp.2d 1056, 1060 (S.D.Ala.2007) (citations omitted); see also Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A., 421 F.3d 1162, 1166 (11th Cir.2005) (similar). In Alabama, this inquiry collapses into a single question because Alabama's long-arm statute permits its courts to exercise personal jurisdiction to the full extent permitted by the Due Process Clause. See Sloss Industries Corp. v. Eurisol, 488 F.3d 922, 925 (11th Cir.2007) ("the two inquiries merge, because Alabama's long-arm statute permits the exercise of personal jurisdiction to the fullest extent constitutionally permissible"); Avocent Huntsville Corp. v. Aten Int'l Co., Ltd., 552 F.3d 1324, 1329 (Fed. Cir.2008) ("Alabama's long-arm statute permits service of process as broad as the permissible limits of due process.") (citation
Due process authorizes the exercise of personal jurisdiction when "(1) the nonresident defendant has purposefully established minimum contacts with the forum" and "(2) the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice." U.S. S.E.C. v. Carrillo, 115 F.3d 1540, 1542 (11th Cir.1997); see also Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1267 (11th Cir.2010) (similar). The minimum contacts analysis varies depending on whether the type of jurisdiction asserted is general or specific. In that regard, facts supporting personal jurisdiction "may be general, which arise from the party's contacts with the forum state that are unrelated to the claim, or specific, which arise from the party's contacts with the forum state that are related to the claim." Nippon Credit Bank, Ltd. v. Matthews, 291 F.3d 738, 747 (11th Cir.2002). Continental invokes both specific and general jurisdiction with respect to these defendants.
"Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum." PVC Windoors, Inc. v. Babbitbay Beach Const. N.V., 598 F.3d 802, 808 (11th Cir.2010) (citation and internal quotation marks omitted). Specific jurisdiction is properly found where (i) the defendant's contacts with the forum state are related or give rise to the plaintiff's cause of action, (ii) the contacts involve some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum, and (iii) the defendant's contacts with the forum are such that he should reasonably anticipate being haled into court there. See, e.g., Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1220-21 (11th Cir.2009); McGow v. McCurry, 412 F.3d 1207, 1214 (11th Cir. 2005). The only contact identified by Continental in support of a "specific jurisdiction" analysis is that "John Jewell and JJA purchased the subject Magneto pursuant to a contact with the State of Alabama the March 17, 2005 Magneto order." (Doc. 10, at 26.)
Plaintiff's efforts to hinge specific jurisdiction on that allegation are unavailing. As a threshold matter, once again, the record citations provided by Continental do not establish that JJA or Mr. Jewell ordered the subject magneto, whereas the record unambiguously confirms that Continental invoiced JA (not the other defendants) for that item and that JA (not the other defendants) paid for it. Thus, this "contact" with Alabama by JJA and Mr. Jewell appears to be nothing more than a mirage, because it was actually an Alabama contact by JA. Of course, "we may not ascribe the forum contacts of one co-defendant to another in determining the existence of personal jurisdiction." Fraser v. Smith, 594 F.3d 842, 852 (11th Cir.2010).
More importantly, even if plaintiff had come forward with an adequate showing that JJA and Mr. Jewell were actually the ones to order the magneto, plaintiff has failed to show that its indemnity causes of action against JJA and Mr. Jewell arise from their purchase of a magneto from Continental in Alabama. To the contrary, the purchase of the magneto is merely a background fact that does not inform any of Continental's claims asserted herein. In plain English, Continental is not suing JJA and Mr. Jewell because it thinks they ordered a magneto from it in Alabama; rather, Continental is suing JJA and Mr. Jewell because it thinks they installed the magneto in Mississippi for a Kentucky customer in a manner that gives rise to an indemnity obligation as a matter of contract or common law.
Given the extremely limited (and perhaps even nonexistent) nature of JJA and
Plaintiff's invocation of general personal jurisdiction principles fares no better. "The due process requirements for general personal jurisdiction are more stringent than for specific personal jurisdiction, and require a showing of continuous and systematic general business contacts between the defendant and the forum state." Meier ex rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1274 (11th Cir.2002) (citations omitted); see also HomeBingo Network, Inc. v. Chayevsky, 428 F.Supp.2d 1232, 1241 (S.D.Ala.2006) ("General personal jurisdiction arises when a defendant maintains continuous and systematic contacts with the forum state even when the cause of action has no relation to those contacts.").
According to Continental, general personal jurisdiction may properly be exercised over JJA and Mr. Jewell because they have customers in Alabama with whom they did $35,000 to $62,0000 in business per year between 2004 and 2006, because they systematically purchased products from Continental, and because they advertised in three national publications and a website. (Doc. 10, at 28.)
Similarly, the fact that JJA purchased materials from Continental in Alabama on an ongoing basis is woefully inadequate to satisfy the strict general jurisdiction test. See Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, 131 S.Ct. 2846, 2857, 180 L.Ed.2d 796 (2011) ("mere purchases made in the forum State, even if occurring at regular intervals, are not enough to warrant a State's assertion of general jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions") (internal marks omitted); Consolidated Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1292 (11th Cir.2000) ("[M]erely purchasing materials, even if done regularly, is not contact sufficient to support personal jurisdiction.").
And the existence of a general informational website and sporadic national advertisements accessible to (but not directly targeted at) residents of the forum state is similarly insufficient to support a finding of general jurisdiction. See Fraser, 594 F.3d at 847 ("the mere existence of a website that is visible in a forum and that gives information about a company and its products is not enough, by itself, to subject a defendant to personal jurisdiction in that forum") (citations omitted); Sherritt, 216 F.3d at 1292 ("Placing advertisements in a newspaper is not a sufficient connection to the forum for in personam jurisdiction."); Charlie Fowler Evangelistic Ass'n, Inc. v. Cessna Aircraft Co., 911 F.2d 1564, 1566 (11th Cir.1990) (defendant's basic listings in The Aviation Telephone Directory were not "purposely directed" activities at Florida residents, and even if they were advertisements, "they are not enough, without more, to provide contacts which comport with due process"); Matthews, 469 F.Supp.2d at 1064 ("A purely passive informational website such as that operated by D & M lacks jurisdictional significance.").
Thus, each of these items taken in isolation is insufficient to constitute the kind of substantial contacts to the forum to trigger general personal jurisdiction over JJA. Nor is there any reason (much less legal argument or authority presented by plaintiff) to think that consideration of these contacts in the aggregate would alter the constitutional due-process analysis in any meaningful way. This is particularly true when the contacts on which Continental relies are juxtaposed against JJA's uncontroverted factual showing that JJA "has never had either an agent or employee in Alabama," "has never provided services in Alabama," "has never attempted to qualify to do business in Alabama," and "has never maintained offices in Alabama." (Doc. 3, Exh. C, at ¶ 7.) These facts, taken in tandem with Continental's relatively slender showing of sales, purchases, and advertisements, establish that plaintiff has not met its stringent burden of showing the kinds of continuous and systematic contacts necessary for the exercise of general personal jurisdiction over JJA by this District Court.
As for defendant Mr. Jewell, Continental simply lumps him in with JJA
More broadly, the U.S. Supreme Court has explained that "jurisdiction over an employee does not automatically follow from jurisdiction over the corporation which employs him.... Each defendant's contacts with the forum State must be assessed individually." Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n. 13, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984). This kind of defendant-specific contacts analysis has not been performed by Continental here. In particular, plaintiff has made no showing that Mr. Jewell's personal conduct would amount to the kind of continuous and systematic contacts with Alabama to subject him to personal jurisdiction in this state; instead, plaintiff would simply wave its hand and suggest in the vaguest of terms that since there is personal jurisdiction over JJA (which there is not), there must be personal jurisdiction over Mr. Jewell too.
Inasmuch as plaintiff has not met its burden of demonstrating that the exercise of personal jurisdiction over JJA and Mr. Jewell in Alabama would be constitutionally permissible, the Court will dismiss plaintiff's claims against both of these defendants for want of jurisdiction.
Next, JA (now the only remaining defendant) urges the Court either to dismiss this action pursuant to the doctrine of forum non conveniens or to transfer it to the U.S. District Court for the Northern District of Mississippi pursuant to 28 U.S.C. § 1441.
As an initial matter, the notion that dismissal of this case is warranted on a forum non conveniens theory because JA believes it would have been preferable for Continental to sue it in Mississippi is a fundamental misapplication of that doctrine. Abundant case law makes clear that forum non conveniens neither contemplates nor authorizes dismissal when a § 1404(a) transfer to another domestic forum is available.
The remaining question, then, is whether transfer is appropriate under § 1404(a). That statute provides that, "[f]or the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). "District courts have broad discretion in deciding whether to transfer an action to a more convenient forum." A.J. Taft Coal Co. v. Barnhart, 291 F.Supp.2d 1290, 1307 (N.D.Ala.2003) (citation omitted); see also England v. ITT Thompson Industries, Inc., 856 F.2d 1518, 1520 (11th Cir.1988). "[I]n the usual motion for transfer under section 1404(a), the burden is on the movant to establish that the suggested forum
JA's attempt to shift the venue of this action from this District to the Northern District of Mississippi is unpersuasive for a host of reasons. First, it is well-settled the plaintiff's choice of forum (in this case, Continental's decision to file suit in a state court found in the Southern District of Alabama) is entitled to substantial weight and will not lightly be cast aside. See, e.g., Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 260 (11th Cir.1996) ("The plaintiff's choice of forum should not be disturbed unless it is clearly outweighed by other considerations."); Bartronics, Inc. v. Power-One, Inc., 510 F.Supp.2d 634, 637 (S.D.Ala.2007) ("a plaintiff's choice of forum should be honored so long as venue is proper there, unless substantial countervailing considerations militate to the contrary").
Second, that deference is magnified where, as here, the parties agreed to a forum-selection clause (the validity and enforceability of which as JA has not been challenged) fixing venue in this forum.
Third, even under a traditional § 1404(a) balancing test, JA has failed to establish that the proposed new forum is more convenient than Continental's selected forum. In this analysis, once it is established that the action could originally have been brought in the proposed transferee forum (which it could have been, inasmuch as JA resides there and a substantial part of the events giving rise to the claim occurred there), courts examine "whether a balancing of the convenience of the parties and the interest of justice favors transfer in the specific case." Baker v. RBS Worldpay, Inc., 2010 WL 4065074, *2 (S.D.Ala. Oct. 15, 2010). In performing
As to witnesses, it is not at all clear that Alabama is an inconvenient forum, given that (i) certain witnesses are already in this district, and (ii) others are located nearby in an adjacent state.
After careful consideration, the Court concludes that JA has not met its heavy burden under § 1404(a) of showing that the desired transferee forum is so much more convenient than Alabama that it should override both the forum-selection clause to which it agreed and plaintiff's choice of forum. In fact, the Court is far from convinced that the Southern District of Alabama is, on balance, any less convenient as a forum for trial than the Northern District of Mississippi would be, even without the significant considerations of the forum-selection clause and plaintiff's choice of forum in accordance with that clause. Accordingly, defendant's request for dismissal or transfer of venue on a convenience theory is
Defendant JA also seeks dismissal of the Complaint under Rule 12(b)(6), arguing that (i) JA owed no duty under the Agreement to indemnify Continental for the actions of another company, and (ii) Alabama law does not allow for recovery of attorney's fees in these circumstances. The Court will address each of these arguments in turn.
Second, JA overlooks express language in the indemnity provision wherein JA agreed to indemnify Continental for claims that "have resulted from or arisen out of any act or omission of [JA], its officers, agents, representatives, servants or employees." (Doc. 3, Exh. A, at ¶ 26.) If JJA or John Jewell was acting as JA's "agent" or "representative" in that installation process, then JA is or may be contractually obligated to indemnify Continental for claims arising from same. Thus, the plain language of the indemnity clause refutes JA's position that it never agreed to indemnify Continental for claims arising from the conduct of JJA or Mr. Jewell, but only promised to indemnify Continental for JA's own wrongful acts. Moreover, a fair reading of the factual allegations of the Complaint is that Continental seeks to hold JA liable under the indemnity provision for the actions of JJA and/or Mr. Jewell as its agents or representatives, as well as for JA's own conduct. Whether, as a factual matter, any such agency or representative relationship existed in this case is not amenable to disposition at the pleadings stage.
Third, and more generally, JA's advocacy of a crabbed, narrow reading of the Agreement's indemnity clause cannot be reconciled with the broad contractual language at issue. In its briefs, JA imputes all manner of narrowing principles to the indemnity language, such as (i) the indemnity clause does not apply because JA was not sued in the underlying proceedings; (ii) the Crouch Action plaintiffs did not assert that JA did anything wrong; (iii) the Crouch Action had nothing to do with the Agreement or JA's responsibilities under same; and (iv) the Agreement only provides for indemnity "for acts and omissions related to JA's actions as distributor under the Agreement." (Doc. 3, at 15-16; doc. 17, at 9.) Again, the indemnity clause to which JA agreed is quite broad. It says that JA must indemnify Continental for all claims "to the extent that such claims, demands, obligations or liabilities have resulted from or arisen out of any act or omission of [JA], its officers, agents, representatives, servants, or employees." It does not specify that the indemnity obligation attaches only if JA was also a party defendant in the underlying action, if the plaintiffs in the underlying action specifically alleged wrongdoing by JA (as opposed its agents, representatives, and so on), or if the underlying action was based on the distributor relationship between JA and Continental or JA's conduct in its capacity as distributor. The indemnity clause will be read in accordance with its plain language, and will not be rewritten now simply because JA wishes it were more tightly circumscribed and less open-ended than it is.
As a separate ground for seeking dismissal, JA also predicates its Rule 12(b)(6) motion on Alabama law of indemnity, more specifically those principles set forth in Stone Bldg. Co. v. Star Elec. Contractors, Inc., 796 So.2d 1076 (Ala.2000). There appears to be no dispute that Alabama law applies to Counts I and II (the contractual indemnity claims); after all, the Agreement provides that it "shall be construed and governed according to the laws of the State of Alabama, United States of America." (Doc. 3, Exh. B, at § 36.) In Stone, the Alabama Supreme Court reaffirmed the proposition that a contractual indemnification provision authorizes recovery of attorney's fees only where "one is defending claims predicated solely upon another defendant's negligence; however, where one is defending for his own benefit, an award of attorney fees will not be allowed." Stone, 796 So.2d
What does that mean in the context of this case? JA takes the extreme position that Stone forbids indemnity on any of the underlying claims litigated in the Crouch Action. Continental occupies the opposite extreme, that Stone allows indemnity on all of these claims. Predictably, the truth lies somewhere in between. Recall that Continental defended itself in the Crouch Action on four triable claims. Three were based exclusively on Continental's alleged wrongdoing. (Doc. 3, Exh. A, at ¶ 44.)
That said, the three Crouch Action claims that did go to the jury fall squarely within the Stone prohibition on indemnification of attorney's fees accrued by an indemnitee in defending against claims based on his own alleged wrongdoing. In a moment of candor, Continental effectively admits its overreach, stating that "it may eventually be determined that [Continental] is not entitled to recover the fees and expenses incurred solely in its defense of the claims exclusive to [Continental]." (Doc. 10, at 44.) But Continental hastens to
To summarize this lengthy Rule 12(b)(6) analysis, the Court finds that Counts I and II state a claim against JA upon which relief can be granted insofar as plaintiff seeks indemnification of attorney's fees and other defense costs expended on the negligent installation cause of action in the Crouch Action.
For all of the following reasons, it is hereby